Executive Summary for Molycorp
Executive Summary:
In order to sustain prosper situation in the company two growth strategies would be implemented – market development and diversification. The first strategy is based on the fact that Molycorp would try to reach new markets with the same products – rare earth and rare metals. The second strategy is diversification. The main idea here is that Molycorp would find new channels of distribution, but now with the new products.
Those strategies would have an affect both on customers and employees. When talking about customers it can be said that both strategies would positively affect them. First of all larger scope of people would be able to receive products from Molycorp, because the company would deal in new markets. At the same time customers would receive new products from Molycorp. Both of Molycorp’s growth strategies would also have a positive effect on employees. New markets as well as new products require more people to be involved in order to create new product, distribute them and make sure that customers are satisfied. That in result would create a lot of new workplaces which would make more future employees happy.
When talking about major event milestones and their due dates it can be said that Molycorp would have 2 major events. The first one is the extension of distribution channels in Brazil or Australian markets. The due date for that event is April 2016. Main event is the time period when the company would start making decent amount of money from the strategies (break-even point). The due date for that event is August 2017, and by that time it is expected to boost sales by 25% as well as increase operating expense margin by 10%.
Those strategies would require funding and resources in order to become successful. Unfortunately it is impossible to say the exact amount of funding needed for strategy implementation. The amount of money would depend on the degree of Molycorp’s CEO strategy approval. On the other hand it is not possible to predict the amount of physical resources (amount of new employees needed). That would be possible after the new markets would be chosen and budget for implementation would be approved by CEO.
Both of Molycorp’s strategies have critical risks. It is important to define them because it would give an opportunity to see what needs to be done in order to minimize those risks (if possible). Main risks are next:
Hard pressure from competitors which in result could lower the demand for Molycorp’s products. In order to minimize that risk Molycorp would need to more resources on research and development of new potential products as well as upgrading existing ones.
Products could be rejected by new customers, because they could be already loyal to competitors. In order to assure that new customers are highly likely to become loyal, Molycorp need to spend more on marketing, especially on Public relations and advertising.
Government regulations could affect negatively Molycorp’s success in new markets. Those regulations are importing quotas and tariffs, new legislations on sales. Unfortunately, there is no possibility to minimize that risk.
In order to make sure that the strategies would be implemented and controlled there is a need to assign different internal departments who would be responsible for specific objectives. All of the Molycorp’s departments would more or less responsible for successful strategy implementation. However, marketing department together with logistics would be the main executors. Logistic department would be responsible for finding new channels of distributions. Marketing department would be responsible for new products developments as well as for controlling logistics department and providing them with the advice.
